Discount Delver: the 10 cheapest trusts on 26 July 2024
We reveal the biggest investment trust discount changes over the past week.
26th July 2024 10:23
by Kyle Caldwell from interactive investor
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Investment trusts, due to their closed-ended structure, offer investors the chance of picking up a potential bargain. Such an opportunity arises when a trust’s share price is lower than the underlying investments held by the trust (the net asset value, or NAV).  Â
However, a trust trading on a discount to NAV is not necessarily a buying opportunity. There’s likely a good reason why the trust is cheap, such as subdued short- or long-term performance, or poor investor sentiment towards how it invests.  Â
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In our weekly series, interactive investor highlights the 10 biggest investment trust discount moves over the past week. We publish this article every Friday, using data up to the close of trading the previous day.  Â
In total, nearly 400 investment trusts have been screened, with the data sourced from Morningstar. Venture Capital Trusts (VCTs) have been excluded. We also strip out trusts with less than £20 million in assets and those that are not available on the interactive investor platform.Â
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The biggest discount mover over the past week, widening by nearly 14 percentage points to -45.4%, was New Star Investment Trust (LSE:NSI). This was on the back of £17 million of its £89 million assets being returned to shareholders.
Second in the table is Riverstone Credit Opportunities Income (LSE:RCOI), which saw its discount widen by over eight percentage points to -23.7%, while in third place was Pershing Square Holdings Ord GBP (LSE:PSH), managed by star investor Bill Ackman. However, despite having a high-profile manager and a stellar performance, the investment trust is on a big discount, which over the past week widened by over six percentage points to -28.5%.
The rest of the table is dominated by infrastructure-focused strategies: Gresham House Energy Storage (LSE:GRID), International Public Partnerships (LSE:INPP), BBGI Global Infrastructure(LSE:BBGI) and Atrato Onsite Energy (LSE:ROOF).
The sector, which targets income-seeking investors, has been out of favour amid rising interest rates, which boosted the level of income on offer in the bond market.
With the safest end of the bond market – money market funds – offering yields of around 5%, investors are less incentivised to take on more risk elsewhere. Â
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| New Star Investment Trust (LSE:NSI) | Flexible Investment | -45.4 | -13.9 |
| Riverstone Credit Opportunities Income (LSE:RCOI) | Debt - Direct Lending | -23.7 | -8.4 |
| Pershing Square Holdings (LSE:PSH) | North America | -28.5 | -6.2 |
| Gresham House Energy Storage (LSE:GRID) | Renewable Energy Infrastructure | -52.0 | -5.6 |
| Seraphim Space Investment Trust (LSE:SSIT) | Growth Capital | -41.3 | -5.2 |
| Augmentum Fintech (LSE:AUGM) | Financials & Financial Innovation | -34.3 | -4.8 |
| International Public Partnerships (LSE:INPP) | Infrastructure | -16.6 | -4.3 |
| BBGI Global Infrastructure (LSE:BBGI) | Infrastructure | -10.3 | -4.3 |
| Apax Global Alpha (LSE:APAX) | Private Equity | -30.6 | -4.1 |
| Atrato Onsite Energy (LSE:ROOF) | Renewable Energy Infrastructure | -25.7 | -3.6 |
Source: Morningstar. *Data from close of trading 18 July 2024 to close of trading 25 July 2024.
These articles are provided for information purposes only. Â Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. Â The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.